Propelled by in-app purchases, mobile gaming revenue to hit $16 billion in 2016

By on August 1, 2011 at 7:50 PM.

Propelled by in-app purchases, mobile gaming revenue to hit $16 billion in 2016

Revenue from mobile gaming is expected to reach $16 billion in 2016, ABI Research said in a report released last week. ABI expects the growth, which is a big jump from the current $5 billion in revenue expected this year, to come from in-game purchases. “An ever-larger share of mobile gaming revenue is coming from virtual goods and other purchases that take place within the game,” ABI Research senior analyst Aapo Markkanen said. “These in-app payments will account for about one-third of the 2011 revenue base, but by the end of 2016 their share will increase to almost half of the total. Also, the in-game advertising revenue will increase considerably, as more and more advertisers take advantage of mobile games’ mass-media potential.” Games such as Zynga’s Farmville and Capcom’s Smurf Village are examples of titles that rely heavily on in-game sales to produce revenue. Markkanen also said that having good game content is a much better business approach to the mobile gaming market than relying on luck, and he used Rovio’s hit game Angry Birds as an example of that. Read on for the full press release from ABI Research. More →

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Farmville creator Zynga files for $1 billion IPO

By on July 1, 2011 at 7:38 PM.

Farmville creator Zynga files for $1 billion IPO

Zynga, the popular gaming company behind hits such as Farmville — and the owner of other smash titles such as Words with Friends on Android and iPhone — has filed for an initial public offering (IPO), The New York Times reported on Friday. It currently has a $20 billion valuation and has plans to offer 10% of its shares; Morgan Stanley will work on the deal. Mark Pincus, the company’s CEO, expects that Zynga can earn $1 billion through the IPO. Unlike some other recent tech IPOs, which have caused many to claim the industry is in the midst of a “tech bubble,” Zynga has had solid earnings through its business model, which typically relies on in-app purchases for in-game currency. The firm reportedly recorded a profit of $90.6 million in 2011 on revenues of nearly $600 million. Zynga currently remains the top-dog when it comes to gaming on Facebook — it has 272.5 million active users across its biggest titles such as Cityville and Farmville. More →

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Apple hit with class action suit alleging targeting of minors with pricey in-app purchases

By on April 15, 2011 at 1:03 PM.

Apple hit with class action suit alleging targeting of minors with pricey in-app purchases

A Pennsylvania man has filed a class action lawsuit against Apple in a U.S. District Court in San Francisco alleging that the firm deliberately targets children with free applications that have appealing in-app purchases. Garen Maguerian believes that kids are purchasing in-app content and unknowingly costing their parents bundles of cash. In-app purchases are a great way to purchase extra content, such as levels or characters, in games. However, games such as Smurf’s Village or FarmVille can charge up to $99.99 for extra content that can be used to advance further in the game. “These games are highly addictive, designed deliberately so, and tend to compel children playing them to purchase large quantities of Game Currency, amounting to as much as $100 per purchase or more,” the suit says. Maguerian believes Apple is fostering these actions by allowing children to buy currency with the same iTunes App Store password they use to download free games. Since minors are entering the agreement with Apple to pay-up, Maguerian thinks that the contracts are not valid. “Apple has not offered to return to its account holders any of the millions of dollars it received from their minor children’s purchases,” Maguerian said in the lawsuit, which he is seeks refunds (including interest), damages, and legal fees. More →

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Facebook signs five year deal with Zynga, crosses 500 million visitor threshold

By on May 18, 2010 at 6:10 PM.

Facebook signs five year deal with Zynga, crosses 500 million visitor threshold

farmville

Farmville fans rejoice as your painfully addicting fanciful Facebook game has gotten a new lease on life. The social networking giant anounced today that it has signed a five year deal with Zynga that will keep the gaming company firmly entrenched in Facebook. In a move that will help solidify Facebook’s form of currency, part of the deal requires Zynga to adopt Facebook’s proprietary credits system for its in-game cash transactions, starting first with a few select games and expanding to Zynga’s other games in the future. As for Facebook itself, not only is the site becoming more influential, but it’s also growing in size with the number of registered and non-registered visitors ballooning to an estimated 516 million in the month of April alone. According to Comscore, this figure places Facebook firmly in fourth place worldwide with only Yahoo, Microsoft, and Google ahead of the gargantuan social network. More →

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